Over the weekend, more details emerged about how Obamacare is transforming the American workforce – and not for the better. The New York Times reported on many small firms not hiring new workers, or scaling back hours for existing workers, to avoid the law’s new taxes. And the Huffington Post reported that Wal-Mart has changed its employment policy, eliminating health insurance benefits for new part-time workers – thereby dumping them on to Obamacare’s exchanges:
Walmart, the nation’s largest private employer, plans to begin denying health insurance to newly hired employees who work fewer than 30 hours a week, according to a copy of the company’s policy obtained by The Huffington Post. Under the policy, slated to take effect in January, Walmart also reserves the right to eliminate health care coverage for certain workers if their average workweek dips below 30 hours.…
Labor and health care experts portrayed Walmart’s decision to exclude workers from its medical plans as an attempt to limit costs while taking advantage of the national health care reform known as Obamacare….“Walmart is effectively shifting the costs of paying for its employees onto the federal government with this new plan, which is one of the problems with the way the law is structured,” said Ken Jacobs, chairman of the Labor Research Center at the University of California, Berkeley.
“Walmart likely thought it didn’t need to offer this part-time coverage anymore with Obamacare,” said Nelson Lichtenstein, director of the Center for the Study of Work, Labor and Democracy at the University of California, Santa Barbara. “This is another example of a tremendous government subsidy to Walmart via its workers.”
In pursuing lower health care costs, Walmart is following the same course as many other large employers. But given its unrivaled scale, Walmart’s policies tend to influence American working conditions more broadly. Tom Billet, a senior consultant at Towers Watson, a professional services firm that works with large companies to develop benefit plans, said other companies are also crafting policies that will exclude some part-time workers from medical coverage. Billet portrayed the growing corporate interest in separating out part-time workers as a reaction to another aspect of Obamacare – the new rules that require companies with at least 50 full-time workers to offer health coverage to all employees who work 30 or more hours a week or pay penalties.
One major bottom-line question in this development relates to how many more people will be added to government health rolls by this apparent trend. In last month’s job data, the Bureau of Labor Statistics estimated nearly 28 million Americans work part-time – defined by the BLS as fewer than 35 hours per week. Using Obamacare’s less stringent 30 hours per week standard would reduce that 28 million number somewhat – and many part-time workers do not have access to employer-provided health insurance currently. (Of firms offering insurance to their employees, 28% extend that offer to part-time workers as well – a fact which only indirectly illuminates the number of part-time workers receiving insurance coverage from their employer.)
All that said, the point remains that millions – and perhaps tens of millions – of part-time workers who currently receive insurance from their employers could lose it due to Obamacare – and federal taxpayers will be stuck paying the bill. That’s not “reform,” and it’s not a change millions of American workers, to say nothing of American taxpayers, can believe in.